Real Estate
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property sale process
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The legal regulations regarding the estate agent commission since 2020 provide for a fair distribution between the buyer and the seller, with the seller having to bear at least half of the commission.
There are various commission models (double commission, pass-through commission, sole commission), and the amount of the commission is negotiable. A professional negotiation can optimise the selling price by up to 5%.
A property sale without an estate agent saves costs but requires significant time and expertise. Alternatively, hybrid models or online platforms can be used to support the sales process.
A property sale can be complex, but with the right preparation and understanding of each step, it can be handled smoothly. This guide provides you with a comprehensive overview of the entire process of selling a property in Germany, from the initial evaluation to the handover of keys. We will show you how to accurately determine the value of your property, which legal aspects you need to consider, and how to conduct the sales process efficiently.
The estate agent's commission plays a central role in this. Since the change in the law in 2020, there are new regulations on the distribution of the commission between buyer and seller. We explain the different commission models and show you how to find the most advantageous solution for you. Discover how to negotiate the estate agent's commission and which factors can influence the price. A professional estate agent can help you achieve the best price and optimise the sales process.
Since 23 December 2020, §§ 656a to 656d BGB govern the distribution of the estate agent's commission in the sale of single-family and two-family houses as well as condominiums. This legal amendment is primarily intended to ease the burden on private buyers and reduce incidental costs in real estate purchases. The most important change is that the seller must bear at least half of the commission if they engaged the agent. A complete transfer of the agent's commission to the buyer is no longer permissible. The Haufe page provides detailed information on this.
§ 656a BGB requires the written form for brokerage contracts. This means that verbal agreements are no longer sufficient. The contract must be concluded at least by email, fax or SMS. § 656b BGB defines the personal scope of application of the new regulations. They apply only if the buyer is a consumer. For commercial buyers, individual agreements can still be made. § 656c BGB governs the entitlement to commission if the broker acts for both parties. In this case, the buyer and seller must equally share the commission. § 656d BGB deals with agreements on the cost bearing of the agent's commission when only one party has engaged the agent. Here, a partial transfer of costs to the other party is possible, but only up to half of the total commission. The Sack Immobilien page offers further details on this.
The so-called 'ordering party principle', which applies to the rental of flats (whoever orders the agent, pays), has not been fully adopted for property sales. Instead, a regulation has been created that provides for a fair distribution of the agent's commission between the buyer and seller. This is intended to ensure that both parties are equally involved in the costs and the financial burden on the buyer is reduced. Further information on the topic of estate agent's commission in house sales can be found in our internal article.
In property sales, there are various commission models that differ in how the commission is divided between the buyer and the seller. The most common models are dual commission, passing on, and sole commission. Each model has its pros and cons, and choosing the right one depends on individual circumstances and preferences.
With the dual commission, the agent agrees a commission with both parties, the buyer and the seller. Both parties generally pay the same share of the commission in this case. An advantage of this model is that the agent has an interest in considering the interests of both the buyer and the seller. A disadvantage may be that both parties have to pay a commission. The Immoverkauf24 website offers more details on this.
The passing on model involves the seller initially assuming the full commission but transferring part of it to the buyer. Legally, it is regulated so that the seller's share should be at least as high as the buyer's. This model is often chosen when the seller has hired the agent and wants to pass on part of the costs to the buyer. The legal framework for this is specified in §§ 656a to 656d BGB.
In the sole commission model, either the buyer or the seller pays the entire commission. There is a distinction between internal commission, where the seller pays, and external commission, where the buyer pays. However, the external commission is subject to certain conditions. The buyer must give the agent a search mandate before the agent has acquired the property. This is to ensure the buyer has indeed hired the agent and is not just benefiting from their activity.
Internal commission (Seller pays)
With internal commission, the seller assumes the full agent's commission. This is often the case when the seller has hired the agent and does not wish to pass on the costs to the buyer. Internal commission is common in some federal states.
External commission (Buyer pays) – Special requirements for the search mandate
The external commission is a model where the buyer pays the entire agent's commission. However, this is only permissible if the buyer has given the agent a search mandate before the agent has acquired the property. The search mandate must be in writing and include the buyer's exact search criteria. The agent must be able to prove that they found the property based on the buyer's search mandate. Otherwise, an agreement for an external commission is invalid. The agent's costs in house sales can vary significantly depending on the chosen model.
The amount of the brokerage commission is not regulated uniformly but varies depending on the federal state. There are typical commission rates that are oriented to the regional market situation. It is important to know these regional differences to better assess the expected costs. Additionally, the brokerage commission is negotiable, and there are strategies you can use to influence the commission.
In most federal states, such as Baden-Württemberg, Bavaria, Berlin, Brandenburg, North Rhine-Westphalia, Rhineland-Palatinate, Saarland, Saxony, Saxony-Anhalt, Schleswig-Holstein, and Thuringia, the usual total commission is 7.14% (including VAT), which is usually split between buyer and seller (3.57% each). In Bremen, the usual commission is slightly lower at 5.95% (including VAT), also divided between buyer and seller (2.98% each). In Hesse and Lower Saxony, there are no fixed commission rates, but variable rates that depend on the market situation.
Baden-Württemberg, Bavaria, Berlin, Brandenburg, North Rhine-Westphalia, Rhineland-Palatinate, Saarland, Saxony, Saxony-Anhalt, Schleswig-Holstein, Thuringia (typically 7.14%)
In these federal states, a commission of 7.14% is common, with costs usually shared between buyer and seller. However, it is important to note that this is only a guideline and the actual commission may vary depending on the individual case.
Bremen (typically 5.95%)
In Bremen, the usual commission is slightly lower than in most other federal states. Here too, the commission is negotiable and may depend on individual circumstances.
Hesse and Lower Saxony (variable rates)
In Hesse and Lower Saxony, there are no fixed commission rates. The amount of the commission is agreed individually and depends on the market situation, the type of property, and the services of the broker.
Negotiation tips: How you can influence the brokerage commission
The brokerage commission is negotiable, and various factors can influence your negotiation position. An important reference point is the so-called 'local customary rate'. This is the usual commission rate in the respective region. Although a broker may demand a higher commission, you have the right to refer to the local customary rate and request an adjustment. The ImmobilienScout24 page provides further details on this.
As a seller, you have more room for negotiation if your property is easily sellable and in high demand. In this case, you may be able to negotiate a lower commission. As a buyer, you have more room for negotiation if the property is difficult to sell, for example, due to defects or an unfavourable location. In this case, you could try to reduce the commission or make a different agreement. It is advisable to discuss the brokerage commission openly with the broker before signing a contract. Clarify all the details and negotiate the most advantageous solution for you.
The brokerage commission is usually due after the notarial purchase agreement has been signed. However, there are cases where the commission is due earlier, such as with a binding purchase offer. It is important to know the exact payment terms in the broker agreement to avoid misunderstandings. Additionally, there are situations in which a commission claim is unjustified. It is crucial to understand these cases to protect yourself from unwarranted claims.
The due date of the commission is generally tied to the conclusion of the purchase agreement. The broker's claim to a commission is fulfilled when they have successfully facilitated the contract conclusion. The due date is specified in the broker agreement. Typically, the commission is due within two weeks of signing the purchase agreement. However, there are also cases where the commission becomes due with a binding purchase offer, if it has been signed by both parties. Therefore, it is important to carefully review the broker agreement and be aware of the payment terms.
There are various reasons that can make a commission claim unjustified. A common reason is that the contract was concluded without the involvement of the broker. If, for instance, you found the property yourself, or the seller sold the property to you directly without any mediation service from the broker, the commission claim is unjustified. Another reason is if the broker has not performed their contractually agreed services. For example, if the broker did not conduct viewings or did not provide sufficient information about the property, the commission claim might be unjustified. An additional important point is the lack of information regarding the right of withdrawal in distance selling contracts. If, for instance, you concluded the broker agreement online or by phone, you have a right of withdrawal. If the broker did not properly inform you about your right of withdrawal, the contract may be ineffective, and you may not have to pay a commission. You should also be aware of the benefits and drawbacks of selling a property without a broker.
If you acquire a property as a landlord and pay a broker's commission for it, you can claim this for tax purposes. In this case, the broker's commission is treated as an incidental acquisition cost and can be depreciated over the property's usage period. It is important to differentiate the broker's commission from direct advertising costs, as they are treated differently.
The broker's commission that you pay when purchasing a property for rental is considered part of the acquisition costs. These costs cannot be fully deducted immediately but must be depreciated over the property's usage period. The duration of use depends on the type of property and is typically 50 years for residential buildings. This means you can claim 2% of the incidental acquisition costs (including broker's commission) annually as depreciation.
It is important to distinguish the broker's commission from direct advertising costs. Advertising costs are expenses directly associated with renting out the property, such as advertising costs or the costs of preparing rental contracts. These costs can be fully deducted in the year they are incurred. The broker's commission, however, is part of the acquisition costs and must be depreciated over the usage period. It is advisable to seek advice from a tax consultant to optimise the tax benefits.
A property sale without an estate agent can be an attractive option to save costs. However, it's important to carefully weigh the pros and cons. A commission-free sale requires a significant time investment and expertise in various areas. Nevertheless, there are also alternatives to the traditional estate agent, such as hybrid models and online platforms that can provide support in the sales process.
The biggest advantage of a commission-free sale is the cost saving. You save the estate agent's commission, which can amount to several thousand euros depending on the region and commission model. Additionally, you have full control over the sales process. You set the sale price, conduct viewings yourself, and negotiate directly with interested parties. This can be beneficial if you have clear ideas and wish to actively shape the sales process.
A disadvantage of a commission-free sale is the significant time investment. You have to manage all tasks that an estate agent would typically handle, such as creating a property listing, conducting viewings, negotiating with prospective buyers, and preparing the sales contract. Furthermore, you'll need marketing expertise to successfully market your property. You need to know how to create appealing photos, draft a compelling description, and present your property on the relevant online platforms. If you have little time or expertise, a commission-free sale can be very demanding. However, there are also alternatives to the traditional estate agent. Hybrid models, for instance, offer a combination of online platform and personal consultation. You can take on certain tasks yourself and get expert support for others. Online platforms offer you the opportunity to list your property yourself and find interested parties. However, you can also book additional services, such as creating a property listing or conducting viewings. Choosing the right model depends on your individual needs and preferences.
The regulations concerning the broker's commission differ depending on whether it is a commercial property or a rental property. For commercial properties, different commission agreements apply compared to residential properties. For rental properties, the so-called 'Bestellerprinzip' applies, which stipulates that the person who hires the broker pays the commission.
For commercial properties, there are no statutory regulations regarding the amount of the broker’s commission. The commission is freely negotiated and depends on various factors such as the type of property, location, and services provided by the broker. It is common for the landlord to pay the commission, although other arrangements are possible. It is important that the commission agreement be made in writing or verbally. However, the broker must explicitly inform the customer about the commission agreement to ensure its validity.
For rental properties, the 'Bestellerprinzip' applies. This means that the person who hires the broker pays the commission, which is usually the landlord. The maximum commission for the tenant is two net cold rents plus VAT. However, the landlord has some negotiation space regarding the commission. They can reduce or completely cover the commission. It is important that the commission agreement is documented in writing to avoid misunderstandings. The Auctoa site offers you comprehensive information and support in evaluating and marketing your property.
The broker's commission is an important aspect of property sales. It is crucial to understand the legal regulations, various commission models, and regional differences to make the best decision for you. Negotiate the commission openly with the broker and seek advice from an expert to safeguard your interests.
The key points regarding broker's commission can be summarised as follows: Since 2020, there are new legal regulations for splitting the commission between buyer and seller. There are different commission models, such as the dual commission, the shifted commission, and the exclusive commission. The commission rate varies depending on the federal state and is negotiable. The commission is usually due after the signing of the purchase contract. There are instances where a commission claim is unjustified. Landlords can claim the broker's commission for tax purposes. Selling a property without a broker can be an option, but it requires considerable time and expertise. In the case of commercial properties and rental objects, special commission rules apply.
The future of the property market is influenced by various trends, such as digitalisation, demographic changes, and rising energy prices. It is important to keep an eye on these developments to make informed decisions. Auctoa supports you in optimally determining your property's value and efficiently organising the sales process. Contact us today to learn more about our services and successfully manage your property sales. Get in touch now!
The Haufe portal provides detailed information on the legal changes in broker law since 2020.
The ImmobilienScout24 site offers additional details and tips for negotiating the broker's commission.
What role does the estate agent's commission play in property sales?
The estate agent's commission is a significant cost factor in property sales. Since 2020, there have been new legal regulations that provide for a fair distribution between buyer and seller. Sellers must bear at least half of the commission if they have appointed the agent.
What does the written form requirement mean for estate agency agreements?
Section 656a of the German Civil Code (BGB) requires written form for estate agency agreements. This means that verbal agreements are no longer sufficient. The contract must be concluded at least by email, fax, or SMS to be valid.
What are the commission models in property sales?
The most common models are the double commission, the passing on, and the sole commission. With the double commission, both buyer and seller each pay a part, with passing on the seller transfers part of their commission to the buyer, and with the sole commission, either the buyer or the seller pays the entire commission.
How can I negotiate the estate agent's commission?
The estate agent's commission is negotiable. As a seller, you have more room for negotiation if your property is easy to sell. As a buyer, you can negotiate if the property is difficult to sell. Find out about the local customary commission and discuss the details openly with the agent.
When is the estate agent's commission due?
The estate agent's commission is usually due after the notarised purchase agreement has been signed. The exact payment terms are specified in the estate agency contract. However, there are also cases where the commission becomes due upon a binding purchase offer.
Can I deduct the estate agent's commission as a landlord for tax purposes?
Yes, if you acquire a property as a landlord and pay a estate agent's commission for it, you can claim this for tax purposes. The estate agent's commission is treated in this case as ancillary acquisition costs and can be depreciated over the useful life of the property.
What are the advantages and disadvantages of selling a property without an agent?
Selling a property without an agent saves costs but requires a lot of time and expertise. You have full control but must handle all tasks yourself, from preparing the sales brochure to negotiating with potential buyers.
What are the special features for commercial properties and rental properties?
For commercial properties, there are no legal regulations on the amount of the estate agent's commission. For rental properties, the ordering party principle applies, which states that the person who instructs the agent pays the commission.
